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OctaFX’s Entry into Malaysia’s Financial Consumer Alert List: What Does it Mean for Traders?

Disclaimer: The text below is an advertorial article that is not part of Cryptonews.com editorial content.

OctaFX has been listed on Bank Negara Malaysia’s (BNM) Financial Consumer Alert List (FCA), alongside an array of other brokers. Grasp the implications this holds for traders.

Over the last year, OctaFX, a noteworthy name among forex brokers, along with a considerable number of its contemporaries functioning within Malaysia, were listed on Bank Negara Malaysia’s (BNM) Financial Consumer Alert List. Additionally, the Securities Commission Malaysia (SC) also included them on its Investor Alert List.

One might question why did OctaFX and other brokerage firms end up on these alert lists?

OctaFX’s mention on the investor alert list compiled by Bank Negara Malaysia

BNM and SC elucidated that these lists are formulated as public notifications to heighten public cognizance about firms not sanctioned or supervised by these regulatory bodies. However, it’s crucial to emphasize that inclusion in these lists doesn’t necessarily indicate that a company, such as OctaFX, is implicated in illicit activities or scams. Instead, it is indicative of their lack of a local operating license.

This circumstance is not unique to OctaFX. Other international brokers, XM and Exness included, also find their names on these lists. Each of these companies holds licensing from various nations. For instance, the regulatory oversight for OctaFX comes from South Africa’s FSCA and Cyprus’s CySEC. Conversely, XM operates under licenses from CySEC and Australia’s ASIC, and Exness holds numerous licenses, from the UK’s FCA to the FSCA in South Africa. However, none of these firms, including OctaFX, hold a license from the Securities Commission or Bank Negara in Malaysia.

XM and Exness Find Their Names on BNM’s Financial Consumer Alert List

Remarkably, there is an absence of licensed Forex brokers within the borders of Malaysia. The single entity that bestows licenses for businesses wishing to partake in securities and derivatives trading within Malaysia is the Securities Commission. Yet, only Rakuten, a joint venture between Kenanga Investment Bank Berhad of Malaysia and Rakuten Securities of Japan, has managed to acquire the capital markets services license (CMSL) from the SC. Meanwhile, other online brokers, along with other investment alternatives like derivative CFD and forex trading, continue to be overlooked by the Securities Commission.

As indicated by the SC Public Register, only a small number of 16 companies are licensed for derivatives dealing, and these primarily include large banks not typically providing brokerage services. Moreover, none of these are actual online CFD brokers. This surprisingly limited figure hints at a scarcity of options for Malaysian investors aiming to enter the international financial markets. Regardless, the Securities Commission and Bank Negara quickly added international brokers like OctaFX to their alert lists. However, the absence of a license mostly affects certain facets of the brokers’ marketing endeavors, as they can still lawfully accept clients from Malaysia.

What advantages do brokers gain by maintaining an international status?

One of the principal advantages is that it permits them to provide superior trading conditions, thereby maintaining their competitiveness in the worldwide market. Regulatory restrictions imposed by local financial regulators can often be stringent, especially regarding the assortment of investment tools, trading conditions, and bonus programs a broker can offer. Such restrictions frequently drive clients towards brokers capable of providing a wider array of instruments, better conditions, copy trading services, and compelling promotional offers. Most of the time, these brokers are international entities providing Forex trading services, such as OctaFX.

Therefore, even if Forex brokers could secure licenses in Malaysia, they might not be in a hurry to do so. The reason is that obtaining a local license could drastically impact their trading conditions, losing their competitive advantage over international brokers.

Securities Commission Malaysia: The overseeing authority for financial service providers

What is the current situation regarding the association of Wak Doyok, Fizo Omar, and Aliff Syukri with OctaFX?

OctaFX appears to have halted its partnerships with these celebrities, given that no new promotional initiatives involving them have been seen in recent times. The broker is not collaborating with any fresh Malaysian influencers. The question remains whether the inclusion of OctaFX on the alert lists impedes the legality of its collaborations with these famous personalities.

Wak Doyok and Fizo Omar involved in OctaFX’s promotional campaign

Does OctaFX still maintain operations in Malaysia?

Indeed, OctaFX persists in its operations within Malaysia. As an international broker, it’s capable of serving clients from the majority of jurisdictions across the globe, a fact substantiated by OctaFX’s clientele covering over 180 nations.

Nevertheless, it’s crucial to gain comprehensive knowledge of financial markets and implement risk management strategies in your trading practices in Forex trading. The absence of these could expose you to considerable risks of financial loss, regardless of the broker you select for trading. Therefore, ensuring you are sufficiently prepared before committing funds and stepping into the world of financial investments or trading is vital.

 

Disclaimer: The text above is an advertorial article that is not part of Cryptonews.com editorial content.